4.7.4 Banking and credit services

The orphan banks were de facto the only credit institutions in the German villages until 1908. See also 6.4, Community tasks and self-help organizations Gradually, banks and financial institutions were established. ¹⁾ Small credit unions and banks came into being around 1907 and it was in this phase that the Krasna Association bank was founded 1912-1913. See also 4.4, The Guilds, Trade and Bank Management in Krasna

Then came World War I and finally Bessarabia’s switch to Rumania. At this time many institutions folded. One of the few association banks to survive this crisis was the Association Bank of Krasna.

After 1920 better opportunities for banking and credit matters came into being. First a brief mention of the opportunities in Russian times:

• Credit from wealthy fellow countrymen
  At the end of the 19th century there were wealthy German colonists. They had large sums of savings, but did not trust banks. They kept their money at home. They loaned money to fellow countrymen whom they knew personally and who were credit worthy. According to Kern ²⁾ one could in Krasna …always obtain large amounts of money.
  Loans were often given on an oral promise to pay the money back and the agreement not to talk about the transaction.
• Orphan banks loaned money to credit worthy citizens against securities (property, promissory note of a third party). The bank also handled private accounts and community accounts. The interest was 5% in Russian times and the bank received 6% interest. The loan was repaid at 10% annually plus interest. Interest rates were a bit higher in Rumanian times.
• Association banks made loans to members. They had to appoint a third party as security. The amount of the loan depended on the credit ability of the applicant.
  

See also 4.4, The Guilds, Trades and Bank Management of Krasna

The larger institutions were new. ³⁾

• The Bessarabian Farmers’ Land Bank (Bessarabskij posemelny bank) with its office in Kischinev made short-term loans to communities and associations to buy larger tracts of land.
• Bank- Share Associations
  (Prior to 1918) the Bessarabian Bank (Banka Bessarabiea) and the Moldavian Bank (Banka Moldowa) both headquartered in Kischinev with branch offices in the larger communities of Bessarabia and (after 1918) the Rumanian Bank (Banca Romaneasca) headquartered in Bucharest with a branch office in Akkerman.
  These banks, which only made short-term loans, liked the Germans for their credibility.
• The Banca Rurala in Bucharest made loans in all of Rumania. Only wealthy farmers made use of it when poor harvest years forced them to buy feed and grain for two years.

It is not known how and where Krasna people did their money transactions individually. We can assume that they used the local institutions mainly. They were also quite suspicious and probably did not make large bank deposits; they preferred stashing their cash in straw sacks. When necessary, they probably would rather have loans with relatives or neighbors. This was more economical than getting bank loans and paying the high interest there.